Abstract
EU politics have experienced vast changes since 2014 from the rise of anti-globalization populist right parties to Brexit. Similarly, populist and nationalist sentiments also appeared in some Southeast Asian democracies such as Taiwan and the Philippines. Despite their national and regional differences, one common characteristic of these developments was that it was those left-behind and economically disadvantaged voters who delivered such results. Trade protectionism and populist nationalism were their answers to ever-growing economic inequality. The growing economic inequality thus has become a common policy challenge to both European and Asian leadership. While political and business elites appealed to inclusive capitalism to address the economic inequality, no holistic, realistic policy combination was ever proposed. This paper is an attempt to translate inclusive capitalism from aspiration to systematic policy actions by employing an Inclusive Development Index (IDI) to the study of an indicative country—Denmark. It was found that those areas which Denmark has been performing well in were areas surrounding acquired equal opportunities: quality public education, health and active labor market policies for developing personal capability from childhood to adulthood, and uncorrupted public services and business-friendly legal and tax regimes for facilitating market competition from business creation to operation, especially for small businesses. Governance was a key to the functioning of this self-producing policy ecosystem, centrally staged as a big investor and enabler for both labor and capital. The distinctive thinking underpinning policy-making—treating economic policies as social policies and vice versa—reconciled economic growth and distributive justice simultaneously, resulting in inclusive capitalism in day-to-day realities. The Danish formula has shown that it was not capitalism that needed to reform, it was the prevailing liberalist orthodoxy that guided governance that was in desperate need of an overhaul.
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Notes
This paper recognized that Denmark was not exempted from the rise of PRPs. The anti-immigration Danish People’s Party has risen in the 2014 European Parliamentary Election and 2015 general election. However, different from other PRPs in the UK and France, its rise was believed largely due to unexpected external factors—the refugee/migrant crisis and the EU’s introduction of compulsory quotas in 2015 at the height of the crisis, rather than the defects of its own politico-economic system. Its support has been in decline since 2016 in the latest polls.
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Luo, CM. Answering economic inequality other than with populism and protectionism: the Danish formula of inclusive capitalism. Asia Eur J 18, 139–155 (2020). https://doi.org/10.1007/s10308-019-00538-2
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DOI: https://doi.org/10.1007/s10308-019-00538-2